Reference no: EM131593420

Question: (Postretirement Benefit Worksheet-2 Years) Elton Co. has the following postretirement benefit plan balances on January 1, 2014.

Accumulated post retirement benefit obligation          $2,250,000

Fair value of plan assets                                         2,250,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends the plan so that prior service costs of $175,000 are created. Other data related to the plan are:

                                                                              2014                   2015

Service cost                                                           $ 75,000             $ 85,000

Prior service cost amortization                                         -0-                 12,000

Contribution to the plan                                               45,000               35,000

 Benefits paid                                                             40,000               45,000

Actual and expected return on assets                           140,000             120,000

Expected rate of return on assets                                       8%                    6%

Instructions: (a) Prepare a worksheet for the postretirement plan in 2014.

(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2014.

(c) Prepare a worksheet for 2015 and any journal entries related to the postretirement plan as of December 31, 2015.

(d) Indicate the postretirement-benefit-related amounts reported in the 2015 financial statements.